Mis-sold Mortgage?

moneyfly

Hello all, I'm new to the forum, but have been money saver for about four years and am currently debt free, poor at the moment, but debt free!

Anyway, I have a question about my mortgage. I naively purchased a house 5 years ago and paid too much. Other houses on the street were selling for about 15k less than I bought mine. I know I should have known better, but I was young(ish) and wanted to move out of my parents fast. I bought at the height of the market and since then the value has dropped and I'm approx 10-15k in negative equity.

Is there anyway that I can claim I was mis-sold the mortgage. I'm struggling to pay the interest only payments, and this is at the lowest rate it's ever been. I feel like I was lulled into a false sense of security, and at no point did anyone (ie surveyor, estate agents, mortgage-seller-man etc) suggest that I was paying over the odds.

I just want to make sure that before I sell up and take the negative equity hit, that there are no other avenues for me to explore.

I fully understand that it is my responsibility and ultimately my fault that this happened, but I just want a little advice if possible.

Cheers in advance!

kingstreet

You've mentioned nothing about how the mortgage was "sold" to you, so how we could possibly advise if it was mis-sold is beyond me.

Details of the offer and how it was arranged would be helpful.

You appear to have made a mistake, which sadly you're going to have to live with. Try to pay as much as you can to reduce your mortgage by overpaying regularly. Haven't your payments dropped considerably?

Looking for a scapegoat is probably not going to get you the result you want anyway.

moneyfly

I thought as much. I think I'm just going to have to suck it up!

shortchanged_2

I understand where you are coming from but I fear there is very little redress for you.

During the boom years banks were chucking IO mortgages at people who didn't really understand the consequences of them.

Out of curiosity who arranged your mortgage for you. Was it through a broker or directly with the bank?

Also how many times is the value of the mortgage to your earnings?

moneyfly

It was through a broker, a friend of my father. The value of my mortgage was about 4.5 times the value of our combined earnings. But my wife is no longer working (due to an addition to the family) so it is currently about 6 times my earnings, but I guess that means nothing now.

shortchanged_2

moneyfly wrote: »

It was through a broker, a friend of my father. The value of my mortgage was about 4.5 times the value of our combined earnings. But my wife is no longer working (due to an addition to the family) so it is currently about 6 times my earnings, but I guess that means nothing now.

It seems poorly thought out all along. I'm afraid you look like one of the unlucky ones who were sold the dream during rampant house price inflation.

I'm afraid I have little advice for you because if you're struggling to pay an IO mortgage then it rules out overpayments to help reduce your capital debt.

I'm sure there are some on here who could offer you some appropriate advice, however you could try to ride it out as best you can. Go to the debt free wannabee board to see if you can cut any of your outgoings.

Otherwise is downsizing an option?

moneyfly

I am considering downsizing, or selling and renting. I'm just not sure what that means if you have negative equity.

beecher2

moneyfly wrote: »

I am considering downsizing, or selling and renting. I'm just not sure what that means if you have negative equity.

You'd have to come to an arrangement with your lender about how you'd pay the shortfall. Downsizing wouldn't be an option unless you have the funds to pay off your existing mortgage, and have a 10% deposit for your new house.

SouthCoast

Having problems with your mortgage payments?

http://mortgagehelp.direct.gov.uk/default.aspx

moneyfly

I'm thinking selling to rent would be the option if when there is an interest rate increase. Thanks for the advice guys.

dunstonh

Is there anyway that I can claim I was mis-sold the mortgage. I'm struggling to pay the interest only payments, and this is at the lowest rate it's ever been. I feel like I was lulled into a false sense of security, and at no point did anyone (ie surveyor, estate agents, mortgage-seller-man etc) suggest that I was paying over the odds.

The most important person you have failed to list in making this important decision is yourself. Buying a house takes personal responsibility. The estate agent wants to sell the house for the best price going. So, no point complaining there. The documentation issued by the mortgage lender and the mortgage adviser carries risk warnings all over the place about the responsibility you are taking on. You also employ a solicitor. The solicitor will tell you the warnings unless you decide to save a few pounds and bypass that and choose to have just conveyancing.

As house prices do not come with a price tag that shows exactly what they are worth and as house prices do go down as well as up you cannot complain about the price you paid. Indeed, you would expect house prices to have a period of decline at least 2, probably three times in a typical 25 year mortgage.

There is no recourse for a decision you made in something like this.